Oil rose further above $75 a barrel yesterday after Saudi Arabia warned that the conflict between Israel and Lebanese Hizbollah guerrillas could ignite a broader Middle East war.

A flurry of refinery outages in the western hemisphere also supported the market.

U.S. crude for September rose 56 cents to $75.61 a barrel by 1155 GMT, climbing for a third day, while London Brent crude gained 57 cents to $75.18.

Prime Minister Ehud Olmert said yesterday he was determined to pursue Israel?s offensive against Hizbollah guerrillas as he met with U.S. Secretary of State Condoleezza Rice to discuss the conflict.

Saudi Arabia?s King Abdullah warned Israel?s actions threatened regional war.

?Saudi Arabia warns everybody that if the peace option fails because of Israeli arrogance, there will be no other option but war,? he said.

The Bush administration said any ceasefire had to involve Hizbollah?s withdrawal from Israel?s border and deployment of an international force in the frontier region.

?We think things may take a turn for the worse in the region before they get better, as the Israelis are feeling a deadline of sorts to flush out Hizbollah,? said analyst Edward Meir of Man Financial.

However, experts agreed bullish sentiment would remain limited as long as the conflict stayed localized and didn?t destabilise exports from the Middle East.

Gains gathered pace after traders said a crude distillation unit at Venezuela?s Amuay refinery ? part of the world?s biggest refining complex and a top supplier of U.S. gasoline imports ? will be shut for five to seven months following a fire last week.